Making Accounting Adjustments to Reach Profit Potential

Having your business reach a profit is important; if it doesn’t, sooner or later the business will fail. As a business manager, you want to keep a close eye on the financial statements and make the necessary (and legal) accounting adjustments to your financial records as needed. These helpful tips can help you make the necessary adjustments to your business’s net income, eye two different profit analysis models, and communicate the reports to your managers.

Adjustments to net income for determining sash flow from operating activities

Accounts receivable, inventory, and prepaid expenses are operating assets used in the profit-making process.

Accounts payable and accrued expenses payable are operating liabilities used in the profit-making process.